Chancellor George Osborne is set to announce sweeping changes in the City in an attempt to revolutionise standards in the banking industry.
The chancellor is expected to endorse the majority of the measures proposed by the cross-party Banking Standards Committee in its 571-page report, “Changing Banking for Good”.
Such measures include the imposition of criminal charges for errant bankers, with a new offence of reckless misconduct in banking management to be passed on to the House of Lords for approval.
And the inclusion of peers within the commission suggests that there is unlikely to be any obstructions to implementing the new measures, even though some of the details – such as a definition of “reckless misconduct” – have yet to be made clear.
The committee acknowledged that though the recent spate of banking scandals has cost some executives their jobs – albeit at vast payouts – it has been far too easy for managers to shift the burden of responsibility.
The report, penned by committee chairman Andrew Tyrie, also suggested that the problems within the industry were pervasive rather than consigned to a few errant individuals.
Andrew Tyrie, chair of the committee, chastises Barclays chairman Sir David Walker over disclosure.
It said that banks had exploited their position as institutions that were deemed too big to fail, and that public trust in them had collapsed to a new low.
Amongst its proposals are radical changes in bonuses, which should provide rewards for long-term profitability rather than short-term; changes to existing regulation to provide accountability; and a dedication to improve competition within the financial system (read more).
Mr Osborne’s announcement will follow warnings last week from regulators that they are ready to crackdown on the lobbying of politicians by banks in an attempt to water down new proposals relating to financial prudence (read more).
Keith McDonald
Which4U Editor
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